Tax Optimization and Risk Management in China

Tax regulations in China differ significantly from those in other countries. Without a thorough approach, your company risks facing penalties, cash flow delays, or even profit losses. We offer a complete package of services that includes:

• identifying and minimizing tax risks;
• optimizing business structure based on available incentives;
• legal and accounting support;
• full protection of your interests at all stages.

Major Tax Risks in China

1. Value-Added Tax (VAT)

• use of invalid or falsified fapiao;
• errors in deductions for personal expenses;
• incorrect accounting of returns, discounts, and prepayments;
• discrepancies between actual sales and issued fapiao.

2. Corporate Income Tax (CIT)

• improper use of subsidies, grants, or regional incentives;
• incorrect declaration of income (including “deemed sales”);
• use of inappropriate fapiao;
• overstatement of expenses and non-compliance with thresholds.

3. Individual Income Tax (IIT)

• risks in withholding taxes from bonuses, insurance payments, and compensation;
• errors in long-term incentive (LTI) calculations and stock option programs;
• incorrect processing of benefits and allowances for employees.

Tax Optimization and Risk Management Services

1. Comprehensive Tax Consulting

• full audit of your current tax structure;
• identification and application of regional and industry incentives (including High-Tech Enterprise status);
• contract and transaction review for NDR (Non-Deductible Risk);
• recommendations on transfer pricing and international double taxation treaties.

2. Cross-Border Tax Planning

• detailed analysis of investment structure, profits, and capital repatriation;
• optimization of M\&A (Mergers and Acquisitions) and PE (Private Equity) structures for tax impact;
• efficient tax structures for dividends and service payments abroad.

3. Currency and Procedural Risk Management

• monitoring and compliance with SAFE requirements for foreign exchange and profit remittance;
• optimization of debt, capital, and interest payments;
• prevention of penalties related to currency control violations.

4. Technical Support and Accompaniment

• implementation of internal audit and control systems;
• proper documentation flow and fapiao compliance setup;
• support during tax and SAFE inspections (if required);
• regular consulting and guidance on tax declaration and analysis.

Why Choose Move to Agency

Tailored solutions for every client We don’t use templates. Each strategy is based on your industry, region, scale, and corporate structure.

Holistic view of tax and risk We analyze not only current numbers but also strategy — how to build a sustainable tax model and avoid penalties.

Expert team with China experience You work with certified CPAs, tax consultants, and lawyers with international backgrounds and in-depth knowledge of Chinese regulations.

Support at every stage From auditing your current tax model to implementing changes, working with regulators, and preparing for inspections — we offer practical solutions, not theory.

FAQ

1. How to optimize the company’s tax structure and reduce corporate income tax?

You can reduce CIT by registering in regions with tax incentives, e.g., obtaining High-Tech Enterprise status with a 15% rate. Businesses in R\&D should properly document expenses to qualify for additional deductions.

2. How to use tax incentives for optimization?

High-Tech Enterprise certification provides a reduced CIT rate. Explore local incentives (grants, holidays, exemptions) and submit complete documentation: technical reports, contracts, audits, and R\&D expense calculations.

3. How to structure cross-border financing to manage tax and FX risks?

Balance equity and debt to avoid excessive leverage, which may draw tax scrutiny. Comply with SAFE rules to keep cross-border transfers legal and penalty-free.

4. How to ensure tax transparency and minimize risks?

Conduct regular internal audits, monitor revenue and expense recognition, use only compliant fapiao, and cooperate openly during inspections to avoid penalties for non-compliance.